turning the corner

Well folks, we are about to turn the corner on the last hour of trade before the 30th April deadline. What a journey it has been.

Hopefully in the next 24 hours we will have a 5 or 12 month debt extension confirmed and a major update on the strategic review that has been taking place in Centro.

What impact this will have to the SP is uncertain, but without a doubt we can rest easy on the following:

1. In December last year the company announced a strategic review. Since then, to their credit, they have stuck to this plan.
2. We have a world-class CEO who is well respected and well tenured in the industry. He is focused on a good outcome for shareholders.
3. No directors have resigned and, apart from the old CEO moving on, we have seen no mass exodus of the senior, experienced management team.
4. To my knowledge, there has been no fire sale of assets or panic to raise cash. In fact, the company has confirmed that the banks are not putting pressure on them for a quick sale.
5. They have a quality advisory team in Lazards and the other external parties involved.
6. The underlying business is performing well. We know the services business generates a lot of income and this will not have changed. As the CEO says, they have a balance sheet problem, not an operating problem.
7. The company appears to have had a number of approaches in one form or another. Yesterday, they said they had rejected these. We will never know the exact details, but we know that one or more parties were there.
8. There has been significant interest in the individual properties. As the company said at the 1/2 year review, they have had "hundreds of calls" and "could sell them within a week". This was confirmed in the media in the last few days. If Centro desperately needed to raise cash, it could.
9. The global credit situation has eased considerably and the panic subsided. While it is not over yet, things are looking a lot rosier.

...and finally, it's been 4 1/2 months since the problem happened. In all this time, if Centro was insolvent or the banks wanted to force liquidation, wouldn't they have already done so?

Good luck everyone. I think tomorrow (or Thursday if they really want to make us wait) is going to be a very good day indeed.